HUB 101 The Vendor Management Problem

Date PublishedJanuary 28, 2017
CompanyOilfield HUB
Article AuthorDave O’Connor
Article TypeJanuary 2017 Issue
CategoryArticles, Oilfield HUB
Tags, , , ,
PULSE Interactive

HUB 101 The Vendor Management Problem

HUB 101: November 2016


Vendors offer products and services that are crucial in all facets of the lifecycle of a well. With each project typically involving 25+ vendors that the producer is responsible for keeping track of, eld supervisor’s days are divided between reporting on actual operations and coordinating with all of their contracted vendors. When you’re looking at price vs cost for the services you need, and with everyone keeping a tight hold on their purse strings these days, how do you get the best possible price, without sacrificing quality, all while staying organized and in control of your project costs? Do you go with the lowest priced bid and chance a sub-par product this time because it’s all you can afford when your regular supplier is just too expensive?

HUB 101 The Vendor Management Problem

Now more than ever, ensuring you are spending your lean dollars wisely is crucial. But it doesn’t mean you should, or have to, sacrifice quality. However, keeping track of all of that information with spreadsheets, and the like, can be a time consuming and costly headache you just don’t need right now. But what if there were a solution that assisted you in controlling your costs and managing your vendors so you don’t have to resort to accepting rock bottom prices? How can the Oilfield HUB service help your company?

The major issue with these systems is the lack of traceable and auditable connections between the producer and vendor in an electronic, real- time manner. This deficiency of accessible communication forces both parties to manage all of the information ow manually through phone calls, emails and their notes. Consequently, information is lost and vendor invoices are often not accurately reflective of the work that was performed, resulting in producers overpaying for equipment, services, supplies and rentals.

●   On the vendor management and performance side of this equation there are several issues to consider:

 much greater pressure from buyers to vet,
rank and track their suppliers.

this is currently being done using multiple

some companies provide part of the certification and safety needed but miss out in many tangible quality control areas
companies without large ERP systems simply cannot do this or it is very costly to add to their service delivery mix
all of these simply add administrative time and needless costs to the company

DFG Projects - Click to enlarge

HUB 101 The Vendor Management Problem

●   Daily Field Reposting has a number of challenges as well:

there are strong requirements to provide accurate and timely field reporting for producers and EPC’s

relevant data covering daily eld operations
to meet company and government reporting requirements
effective cost tracking and control to meet internal AFE and JV accounting requirements

current solutions are very costly and most
are not as easy to use in the eld as people would like

Master Vendor List – Click to enlarge


●   All businesses need to be able to con firm their own supply network, ensure procurement requirements are met and meet their own client’s needs:

 the viral marketing concept HAS been proven

the industry WANTS and NEEDS a way to control costs and manage vendors that is simple but comprehensive

the industry WANTS and NEEDS a simple, easy to use and low cost method of completing daily field reporting

●   By breaking out of the spreadsheet paradigm, the Oilfield HUB service and online supply network provides:

 tangible business benefits to both Buyers and Suppliers

eliminates costly and error-prone redundant data entry

the ability for HUB clients to prove to their customers they have a Quality Management System in place for both vendor management and supply chain logistics

comprehensive field reporting that is cost effective and simple to use

Demo Vendor List - Click to enlarge
Regardless of their size, many vendors
are still using similar and outdated systems
and processes for cost tracking.

HUB 101 The Vendor Management Problem

Dave O’Connor
Vice President – Sales
(403) 910-4172

HUB 101 The Vendor Management Problem






Originally  published in the 

January 2017 Issue of Oilfield PULSE